The number of small businesses working in collaboration with each other is one of the many reasons for an upsurge of growth in NSW, according to a study released by American Express, as part of its Shop Small campaign this month.
According to the Australian Treasury, the sector has grown 1.1 per cent this year to 2 million businesses total, making up 97 per cent of all business in the country. With American Express reporting that half of all Australians prefer to buy from small businesses, this is good news for owners. To make the most of this positive environment, it might be a good move to utilise strategies to stay ahead.
More people want to own a small business
Part of the reason why more people are warming up to the idea of starting their own small business is a change in the way people perceive the way they work, according to Dr Lara Moroko, lecturer in management at the Macquarie Graduate School of Management.
“We’re seeing a real shift in the make-up of Australian small business owners, which we can attribute to a few key behavioural and cultural changes,” she told the Shop Small campaign.
According to Dr Moroko, one of the reasons why entrepreneurialism is so high in 20-30-year-olds is a desire to work for themselves and avoid working for salary.
On top of that, the Shop Small study found more consumers are willing to support these endeavours, with 48 per cent making an active choice to buy from small businesses.
Small businesses like working with other small businesses
Small businesses like to support those of a similar size, sourcing goods and services from 4.4 other small suppliers on a monthly basis. The study found that given a typical month, small businesses spend an average of $8,600 with other small businesses, totaling to over $100,000 a year.
This suggests a strong collaborative environment within the Australian community, as more people choose to buy and exchange goods and services with each other over larger corporations.
However, owning a small business is not without its challenges.
Cash flow is still the number one problem
Cash flow is still the constraining factor for many business owners, according to StartupSmart. Despite their beneficial impact on the local and national economy, the ability to juggle cash reserves can make or break small businesses.
The best way to offset this risk is to seek advice and business support systems to help track your finances and stay on top of things. At DBS Accountants we’re here to work with you, offering a range of high-quality accounting, financial and business advice, targeted to your SME. Get in touch with us today.